Euro-Zone Industry Output Picks Up

Industrial production in the 17 countries that use the euro rose in January for the first time since October, while the annual rate of inflation in February was unchanged and well above the European Central Bank’s target.

The European Union’s official statistics agency Eurostat Wednesday said industrial production in January was 0.2% up from December, but 1.2% lower than in January 2011. The figures were weaker than expected, as economists surveyed last week had estimated that output rose by 0.5% on the month, and fell by 0.7% on the year.

Eurostat also said that consumer prices rose by 0.5% from January, and were up 2.7% from February 2011. The annual rate of inflation was in line with Eurostat’s preliminary estimate, while the figure for January was revised up to 2.7% from 2.6%.

Although muted, the pickup in industrial production will confirm expectations that if the euro zone is to enter a recession, it will be mild, at least in its initial stages. The euro-zone economy contracted in the final three months of last year, and the European Commission has said it expects another contraction this quarter, which technically would amount to a recession.